Headlines On Deadline...

June 1, 1998

Are investors bullish on managed care again? HMO stocks made a stunning comeback in the first quarter of the year. The holding companies of four of the nation's 10 largest for-profit HMOs have recently traded near two-year highs, bouncing back from 1997 sell-offs. Winners: United HealthCare, Sierra Health Services, Humana and United Wisconsin Services. Meanwhile, another one of the big 10, Oxford Health Plans, didn't gain many investors' confidence after reporting a first-quarter loss of $45 million.... More than a thousand pharmacies in New York and New Jersey are expected to take part in a class-action lawsuit against Aetna U.S. Healthcare over money they say they are owed under a capitation program the company ran until 1996. Aetna says it owes the pharmacists nothing and has asked a judge to dismiss the suit.... Blue Cross Blue Shield plans from more than 35 states have jointly sued the tobacco industry to recoup expenses of treating smoking-related illnesses. The Blues may seek up to $10 billion for each year they spent money covering such treatments.... Eighteen percent of Medicare recipients in 1996 were asked about their health status before enrolling in HMOs — a violation of Medicare rules — according to an inspector general's report released by the Department of Health and Human Services. This is way down from the 1993 level of 43 percent, but HHS says it is "still a concern."